Tax expert Mark Chapman reveals why thousands of dollars in legitimate deductions go unclaimed each year
What’s happening: Australian taxpayers are leaving thousands of dollars unclaimed through missed deductions and poor timing. H&R Block warns that rushing to lodge early can result in incomplete data, while commonly overlooked work expenses remain unclaimed across the country.
Why this matters: With sophisticated ATO data matching now standard, taxpayers need strategic approaches to maximise legitimate refunds while avoiding scrutiny. Professional guidance and proper timing can significantly impact final refund amounts without increasing audit risk.
Australian taxpayers are leaving significant money on the table each year, with legitimate deductions going unclaimed due to simple oversights and poor record-keeping practices.
“Thousands of dollars are left on the table each year because taxpayers miss legitimate deductions,” explains Mark Chapman, Director of Tax Communications at H&R Block. The ATO has highlighted some outrageous deduction attempts, including a mechanic who tried to claim gaming consoles and household appliances as work-related expenses, but the real issue lies in the opposite direction.
Chapman identifies the most commonly overlooked claims: “Work-related expenses such as home office running costs, professional subscriptions, union fees, or work-related phone and internet use” are frequently missed. Additionally, “self-education expenses when study directly relates to your current employment, depreciation on tools, equipment, and technology used for work, and donations to registered charities (with a receipt) are also often missed.”
The expert emphasises caution alongside opportunity: “While it’s important to claim everything you’re entitled to, you also need to be cautious. The ATO uses sophisticated data matching to spot unusual claims. To stay safe, always keep receipts, ensure deductions are directly work-related, and don’t copy last year’s return without checking if circumstances have changed.”
Timing matters
The rush to lodge tax returns early in the financial year may be costing taxpayers money, with incomplete pre-fill data leading to missed income details and potential penalties.
“The ATO’s pre-fill data is a helpful tool, but it’s not complete early in the tax season (in July for example),” Chapman warns. The timing issue stems from reporting delays: “Banks, employers, health insurers, and investment platforms often take weeks to finalise and report data.”
This creates a costly trap for early lodgers. “If you lodge too early, you risk missing income details such as bank interest, dividends, or private health insurance information—leading to amendments, delays, or penalties,” Chapman explains. His recommendation is clear: “Waiting until now, when you can be confident that the pre-fill is accurate, ensures most data is available and your return is accurate the first time.”
The government has proposed a $1,000 instant tax deduction for work-related expenses starting from the 2026-27 tax year, but current rules still require careful documentation and timing.
Strategic planning
Forward-thinking taxpayers can position themselves for better refunds through year-round planning, rather than scrambling at tax time.
“Maximising your refund isn’t about cutting corners—it’s about planning,” Chapman states. “Although lodgement of next year’s return feels like an age away, there are things you can do even this early in the tax year.”
His strategic recommendations include: “bringing forward deductions such as work-related purchases or charitable donations before 30 June, tracking your expenses properly using apps, spreadsheets, or your tax agent’s tools, and keeping receipts for anything you think might be claimable.”
Investment strategy also plays a crucial role: “Reviewing your investment portfolio to see if capital gains can be offset by realising losses also helps.”
For the 2024-2025 financial year, the work-from-home fixed rate method allows claims of 70 cents per hour, covering electricity, internet, phone usage, and stationery expenses, but detailed hour logs are required.
Expert advantage
Professional tax preparation services offer benefits beyond simple form completion, providing audit protection and identifying overlooked deductions.
“Engaging a registered tax agent can identify deductions you may have missed and defend your claims if the ATO asks questions,” Chapman concludes. The combination of professional expertise and proper preparation creates the optimal outcome: “With the right preparation, you can claim everything you’re entitled to, reduce your risk of ATO scrutiny, and put yourself in the best position for a healthy refund.”
The message is clear for Australian taxpayers: success lies not in aggressive claiming or early lodging, but in comprehensive planning, accurate record-keeping, and strategic timing backed by professional guidance when needed.
Disclaimer: The information provided is for general informational purposes only and should not be considered tax, legal, or accounting advice.
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